Tuesday, October 25, 2011

Free The Grapes

A bill introduced into the House of Representatives, House Resolution 1161, if enacted by Congress, would give states the ability to pass discriminatory wine shipping bans and other anti-free market legislation without consequence of court challenge if the laws are discriminatory or protectionist. The proposed law would reverse the effect of the 2005 Granholm v. Heald Supreme Court decision that declared states must treat in-state and out-of-state wine shippers equally. The landmark Granholm decision and subsequent court decisions based on it has led to a robust market in fine wine across the country, provided the means for small, family-owned wineries to compete, spurred a flourishing of licensed and regulated specialty wine retailers to serve consumers, and gave consumers access entire market for fine wine.

How does this hurt? HR 1161 would make state laws that are in violation of the Commerce Clause, or any other federal provision, immune from challenge. If this or a similar bill passes, it will be virtually impossible for consumers, winemakers or others to challenge these discriminatory bans. Only 17% of wineries are distributed nationally, and 54% of them were unable to find a wholesaler in states where they actively sought representation, according to a survey by Wine Institute, a public policy trade association representing more than 900 California wineries. As a result, many wineries now rely on direct sales to survive. If a winery cannot secure distribution, but is prohibited from selling to its customers directly, it will be locked out of the market and consumer choice is significantly diminished. Bad for you, bad for your local wineries. HR 1161 would give wine wholesaler middlemen the power to pass state laws to gain unfettered monopoly power and to pass discriminatory laws that would not only reduce consumer choice in wine, but also hurt businesses, jobs, and state and local economies.

While I certainly understand the blatant attempt at securing a monopoly, I find it completely ridiculous that this bill has a chance of passing.


1 comment:

  1. Maryland, just this Fall, finally made it legal to ship wines into state. Big pain it has been. Let's hope this bill won't go anywhere.